More From Owning It: Small Business

James “Rock” Rockhill, The Rockhill Group

James "Rock" Rockhill, who retired from the U.S. Air Force in 2004 after 21 years as a fighter pilot, was used to doing big things: working as an air-traffic controller at Luke Air Force Base, near Phoenix; flying F-15s for several hundred combat hours in Operation Desert Storm, Bosnia and Serbia; and training young military pilots how to fly fighter jets.

But when Rockhill started to build a small company around providing aviation services for the federal government, advisors told him he was aiming too high in bidding for multimillion-dollar contracts.

"It's very difficult for small businesses to get federal contracts, because the government, especially for aviation control, prefers to hire folks who have experience already [working] with the government," said Rockhill. "I learned that I needed to pick a more finite niche."

After months of researching and preparing proposals, The Rockhill Group (TRG) won its first federal contract in 2005: $38,887 to supply pilot-training materials to the Air Force. "I tried to be as competitive and low-priced as I could … finding a place in Orlando that offered me a 40 percent discount off the materials. I think I [sold it] for just a few dollars above that," Rockhill said.

For nearly six years, revenue for Gulf Breeze, Florida-based TRG stayed flat at $2 million, as the company slowly won larger contracts for things, like providing weather observation services at seven—then eventually 19—airports for the FAA. (Rockhill formed two other companies—a flight school for Navy pilots and a fixed-base operation services firm—to help supplement sales.)

In 2012, Rockhill started bidding for what he referred to as the "big, rare contracts," which involved pilot training, aircraft maintenance and supplying aircraft. This expansion of federal contract work has helped TRG grow to a company of 200 employees today spread among 25 U.S. locations, with $20 million in annual revenue and more than $72 million in government contracts. While running a business that's fully dependent on federal contracts has its cons—during last year's shutdown, the government was late in paying TRG's invoices—Rockhill said immediate growth will still come with applying for bigger contracts.